Compressed gas from a compressor or other source usually contains as contaminants water and oil in both loose or liquid and aerosol or vapor states. Since the presence of either or both of these contaminants may detrimentally affect devices operated by compressed gas, it is customary to subject the contaminated gas to filtration to at least reduce its contaminant content and an effective way to reduce its moisture content is by adsorbtion by a molecular sieve or other desiccant. However, the problem this presents is that a desiccant, such as a molecular sieve, when exposed to oil in either a liquid or an aerosol or vapor state, soon becomes coated with oil which blocks or clogs the openings in the particles of the desiccant through which they adsorb moisture. In the more efficient assemblies for decontaminating compressed gas, such as the twin tower assembly of my U.S. Pat. No. 4,468,239 ('239), it therefore is the practice to include in advance or upstream of the desiccant an inbuilt oil separator adapted to coalesce and separate at least part of the oil from the gas. An improvement on that practice is that disclosed in my U.S. Pat. No. 4,519,819, issued May 28, 1985, in which the contaminated compressed gas, before entering the filtering or decontaminating assembly, is passed through a precoalescer unit adapted to coalesce and separate oil from the gas. Designed for use with the Twin Tower Assembly of the above Frantz U.S. Pat. No. 4,468,239 ('239), the precoalescer unit of the later patent is a single-stage unit particularly suited for coalescing and separating oil in the form of a fine mist or aerosol. More effective still and adapted for use with either a heavy-duty decontaminating assembly, such as the Twin Tower Assembly of patent '239, for diesel locomotive or industrial installations or lighter duty decontaminating assemblies or units adapted for installation on rapid-transit cars, busses and trucks, either alone or in advance of a one unit or tower filter assembly, is the two-stage coalescer unit of the present invention.